According to a recent article, the Boston area housing market is getting downright competitive. As a sign of that market frenzy, many buyers’ offers now include escalation clauses — agreements to pay a specific amount over the highest bid on a property.
After dealing with underwater mortgages and a multi-year housing crisis, this trend in the local residential real estate market may be good news to many readers. However, an attorney might caution that escalation clauses might also create another potential area of dispute between buyers and sellers, such as whether a party has complied with the applicable terms.
On the other hand, the terms of an escalation clause might be crafted to allow potential buyers an opportunity to decide whether they would like to submit a higher offer. In such clauses, buyers might make an initial bid below the list price, with an opportunity to decide whether to follow through on topping the property’s highest bid.
An attorney that focuses on residential real estate matters can provide assistance to potential buyers at all stages of a transaction. For example, an attorney can review title examination reports and purchase agreement terms to help individuals avoid any hidden clauses or surprises. Of course, an attorney can also be present at a closing, ensuring that all necessary forms and procedures are followed. If any disputes arise after a closing, a real estate attorney can also provide strong advocacy to help resolve such matters in a timely and cost-effective way. An attorney can make even themost complex real estate transactions go smoother.
Source: Boston Globe, “Tight housing market drives rising bids,” Jay Fitzgerald, April 14, 2014